Serbia’s central bank sold 20 million euros ($26.3 million) today to bolster the weakening dinar, after the local currency fell to its lowest in a decade three days before presidential and parliamentary elections.
The Narodna Banka Srbije acted to “ensure the smooth functioning” of the market, the Belgrade-based bank said in a statement on its website. The dinar was trading at 111.66 to the euro at 4 p.m. in Belgrade after declining to 112.22 at 10:05 a.m., according to data compiled by Bloomberg.
The dinar’s weakness is temporary and the currency should strengthen if the government that emerges from May 6 elections convinces the International Monetary Fund it’s serious about fiscal tightening, the newspaper Novosti cited central bank Governor Dejan Soskic as saying today.
The central bank has spent 728.5 million euros this year so far to curb the dinar declines.
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